Brazil Reclaims Top 10 in Global IT Investment

Nation’s Tech Spending Surges, Outpacing World Average

Brazil has re-entered the global elite, now ranking among the top ten nations investing in information technology. This resurgence reflects a robust 13.9% growth in IT investments for 2024, significantly exceeding the global average of 10.8%.

Tech Sector Drives Economic Growth

The Brazilian IT market’s investments reached an impressive USD 59.5 billion, now accounting for 3.8% of the country’s Gross Domestic Product. This performance positions Brazil as the tenth largest global spender in software, hardware, and services.

Dominance in Latin America

Within Latin America, Brazil leads IT expenditure by a substantial margin, capturing nearly 35% of the regional total. Mexico follows with 23%, and Argentina with 14% of the market share.

Innovation Flourishes in Small Businesses

The domestic software industry is characterized by a high concentration of micro and small enterprises, making up approximately 94.5% of companies. This structure underscores the “importance of local innovation in a highly fragmented ecosystem.”

Key Industries Drive Demand

Financial, telecommunications, and industrial sectors were the primary drivers of technological solutions demand. Notably, the industrial sector, encompassing manufacturing and logistics, saw a remarkable 22.1% increase in IT investments, signaling accelerated digitalization in production chains.

Future Trends Point to AI

The adoption of Cloud, IoT, and CRM applications continues its upward trajectory. Looking ahead to 2025, the report highlights generative artificial intelligence and autonomous agents as emerging key trends shaping the market.

Projected Growth for 2025

The IT market is forecast to continue its expansion in 2025, with an anticipated 9.5% rise in investments. This projected growth rate slightly surpasses the estimated global average of 8.9% for the same period.

Tariffs Pose Indirect Risk

While recent US tariffs on Brazilian products primarily target manufactured goods, potential indirect impacts on IT investments from affected sectors could arise. This might lead to “defensive economic decisions” as businesses navigate evolving trade landscapes.

Export Performance Trails Domestic Growth

Brazilian software exports saw a modest 2.5% increase, with services growing by 2.9%. These figures lag significantly behind the robust progress observed in the domestic market.

Cloud and AI Investments Soar

In 2024, Brazil allocated USD 3.5 billion to public cloud services, a 20% surge. Investments in generative AI projects reached USD 2.4 billion, up 30%, while ERP solutions saw USD 4.9 billion invested, with SaaS models dominating 30% of implementations.

Government Initiatives Foster Digitalization

Strategic government policies, including the Brazilian Artificial Intelligence Strategy (EBIA) and E-Digital, alongside the National Internet of Things Plan, aim to boost digitalization and productivity. A proposed USD 4.07 billion investment plan from 2024 to 2028 focuses on business innovation, infrastructure, and training.

Challenges Remain for SMEs

Despite advancements, many small and medium-sized enterprises (SMEs) still grapple with low digital maturity, lack of integrated systems, and limited access to financing. A deficit in specialized talent and tax bureaucracy present significant hurdles.

Regulatory Concerns Over AI Bill

The proposed Bill 2.338/2023 concerning Artificial Intelligence has drawn criticism for being potentially restrictive, regulating the technology from its inception rather than focusing solely on high-risk applications.

Maintaining Regional Competitiveness

While Brazil leads in Latin America, its market share decreased slightly from 36.7% in 2023 to 35% in 2024, underscoring the need for continued efforts to maintain regional competitiveness.

Pioneers of Brazilian Tech Growth

Companies like TOTVS, a leader in Brazil’s ERP software market, and Stefanini, a global consultant with an “AI-First” approach, exemplify Brazil’s significant strides in the technology sector.

Consolidating Global Standing

Brazil’s return to the forefront of technological investment is driven by domestic expansion, widespread adoption of cloud and AI technologies, and supportive government policies. To solidify this position, addressing the deficit in technological exports, bolstering SMEs, and enhancing talent development, regulatory clarity, and digital inclusion are crucial.